TRX Price Drops Over 29% in Last 3 days, USDD Lost its Dollar Peg, $2B Injected to Fight Back

Key Takeaways

  • Tron(TRX) has seen a price drop of more than 28.71% in the last three days, according to the data available from CoinmarketCap.
  • USDD has lost its dollar peg and is currently trading at $0.9827. As a result, $2 billion was deployed from TronDAO Reserve to defend its $1 peg.

Price Analysis of USDD

USDD(Decentralized USD) is the first over-collateralized decentralized Stablecoin with a guaranteed minimum collateral ratio of 130%. The TRON DAO Reserve is the custodian of USDD and ensures its price stability.

Given below is the USDD to USD Chart since its launch. We can see the decrease in the price of USDD easily. The price of 1 USDD should be equal to 1 USD, but if we talk about the USDD, we can see that it has regularly lost its dollar peg in the past. For this data, we would like to credit CoinmarketCap. Here is the list of everytime USDD has lost its dollar peg:

  1. 4th April 2022: USDD was trading at $0.9917.
  2. 12th April 2022: USDD was trading at $0.9852.
  3. 25th April 2022: USDD was trading at $0.9952.
  4. 13th June 2022: USDD was trading at $0.9866.
  5. 14th June 2022: USDD was trading at $0.9825.

Trx Price Drops Over 29% In Last 3 Days, Usdd Lost Its Dollar Peg, $2B Injected To Fight Back
USDD/USDT

We have manually curated this list. If someone has any doubts, please reach us at [email protected]

What is the Reason Behind this Price Drop?

Blockchain Analytics firm Nansen have detected that one of the funds that capitalized on the UST depeg has started actively transferring more significant amounts of USDD and other stablecoins.

Transfer Of Funds
Transfer of Funds

What is Tron doing to restore USDD’ Dollar Peg?

Firstly, Tron DAO Reserve has received 700 million USDC to defend its USDD peg. Now, its USDD collateralization rate is nearly 300%. Here is the link to the transaction: https://tronscan.io/#/transaction/8e2a0f8581815608272ba02ce07de90cf5c6362a739cce07df4e158101302eab

Fun Fact: It only cost $0.52 to send $700M USDC. Below is the screenshot of the same transaction.

Low Gas Fee In Tron Blockchain
$0.52 Gas Fee in Tron Blockchain for Sending 700 Million USDC

Also, Justin Sun tweeted that, Funding rate of shorting #TRX on @binance is negative 500% APR. @trondaoreserve will deploy 2 Billion USD to fight them. I don’t think they can last for even 24 hours. Short squeeze is coming.

Short Squeeze Expected
Short Squeeze Expected

On the other hand, TRON DAO Reserve has increased its USDC supply on Tron to 650,000,000 USDC. Currently, USDC supply on TRON has reached $2.5 billion.

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Yash Kamal Chaturvedi

Btech Computer Science, Maharshi Dayanand University, Rohtak (2023)

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